Toyota will invest in Uber, team up on auto-leasing program

Toyota Motor Corp. said it’s making a strategic investment in Uber Technologies Inc. as automakers race to align themselves with the fast-growing ride-hailing industry. The companies will also work together on offering auto leases to Uber drivers. The investment is small, and Toyota has no interest in taking a big position in the ride-sharing company or eventually controlling it, said a person familiar with the situation who asked not to be named. Toyota could easily get out of the investment if the partners decide to go their separate ways, the person said. The Japanese carmaker wants to build its expertise about how consumers use ride-sharing services, the person said. Toyota and Uber, the largest global ride-hailing provider, declined to comment on the size of the investment. Automakers have been developing alliances with ride-hailing services, seeking partners that can help sell more cars. Gett Inc., an Uber rival in Tel Aviv, said on Tuesday that it raised $300 million from Germany’s Volkswagen AG. Didi Chuxing, the Chinese car-booking giant, received a $1 billion investment this month from Apple Inc., which has had a car project in the works. Daimler AG acquired a pair of ride-hailing startups in 2014. In January, General Motors Co. invested $500 million into Lyft Inc., the second-largest U.S. ride-hailing service, and GM’s president joined Lyft’s board. GM leases vehicles to Lyft drivers in Chicago, and the companies plan to expand the program. Threat, Opportunity The hundred-plus-year-old auto industry is grappling with a variety of technological changes, including ride-sharing, self- driving capabilities and increasing regulatory pressure to reduce pollution. “The automakers see a threat and an opportunity,” said Alan Baum, an independent auto analyst in West Bloomfield, Michigan. “If all they’re doing is selling vehicles and don’t see the customer again for years, then that’s a problem. If they can find a way to generate ongoing income, then that’s what they want to do.” Among its global competitors, Uber has a strong position in congested urban centers where ride-sharing is taking root first, Baum said. Toyota and other automakers want to jump on the ride-sharing bandwagon partly because investors are pushing them to do so, he said. Uber has raised more than $10 billion in capital since it was founded in 2009. The company has been seeking strategic investors, people familiar with the matter said last year. Leasing Programs With Toyota, Uber will augment its existing leasing programs, which also include Enterprise Holdings Inc.Short-term leasing programs, such as those offered by Uber and Lyft, have recently attracted the attention of regulators in California, which are considering banning the practice. Toyota and Uber hope to begin providing the new leasing options by the second half of this year, said Keisuke Kirimoto, a Toyota spokesman. “We realize that this collaboration has potential, but we want to start it out as a pilot project,” Kirimoto said. “We want to explore and then see what will be possible.” By Eric Newcomer and David Welch/Bloomberg